Chile Inflation Tops 13% as Weak Peso Adds to Price Pressure

Chile’s inflation hit a new 28-year high in July as food and transportation prices surged and the peso plunged to an all-time low, boosting pressure on the central bank to extend its aggressive interest rate hikes, Bloomberg News reported. Prices rose 13.1% from a year prior, more than the 13% median forecast of economists in a Bloomberg survey. Monthly inflation stood at 1.4%, the national statistics institute reported on Monday. Chile’s annual inflation rate has risen for 17 consecutive months amid several back-to-back shocks. Last year’s domestic stimulus and early pension withdrawals sparked a consumer spending boom, while higher global commodity prices and the peso’s nose-dive worsened price pressures in 2022. In response, the central bank has raised rates by 925 basis points in just over a year and will likely lift them again next month. Food and non-alcoholic beverage prices rose 1.9% in July as meat and fruit jumped by 3.1% and 5.1%, respectively, according to the statistics agency. Transportation costs leaped by 3.4%, with gasoline soaring by 4.6%. Meanwhile, clothing prices fell 2.7% during the same period. Read more.